UK businesses should make use of the online EU VAT refund portal whilst they know they still can!
The UK tax authority, HMRC, has recently issued guidance notifying UK businesses that their EU VAT refund claims for the year 2018, under the electronic EU VAT refund procedure, should be submitted, at the latest, by 5pm of 29th March 2019.
Even more cautious, are the flurry of Brexit VAT notices published by several Member States, urging UK companies to file their claims several weeks in advance of Brexit. This implies that refund claims will need to have been processed by receiving tax authorities before the anticipated exit day.
Such action is necessary because in the event of a no-deal scenario, the UK will have third country status from 11 p.m. G.M.T on 29th March 2019 and HMRC’s access to the EU-refund portal will be switched off. This will make it impossible for HMRC to transmit claims to the tax authorities of the relevant EU Member States.
Instead, no longer being a part of the bloc, the UK will be required to follow the procedural rules applicable to third countries, meaning applications must be submitted directly to the individual tax authorities. Submissions must generally be made in paper form and include all original documentation. Those accustomed to using the electronic refund portal will find the process lengthier and more burdensome.
Companies are advised to familiarise themselves with the different refund systems of the various Member States since the compliance requirements such as filing deadlines, documentary proof and tax representative stipulations can vary wildly between them.
HMRC also advises UK businesses seeking to reclaim VAT incurred during the first quarter of 2019, to use the non-EU refund mechanism because depending on the Member State, the claim may be rejected.
If you require further advice on claim timeframes and likely amounts that are recoverable or would like assistance in preparing your refund claims, please on the click on the link below to fill out our VAT recovery form.